Who doesn’t love cashing in on members-only perks? Maybe you’re sipping champagne in an airport lounge, compliments of your frequent flier status; collecting free fragrance and skin-care products after shopping at your go-to beauty store; or seeing a 20% member discount pop up after punching in your phone number at the grocery store checkout. You know there’s a trade-off, but you deserve a bonus for your brand loyalty. Unfortunately, something new and sinister is lurking behind those loyalty programs. Loyalty programs are offered to consumers as a way to reward loyalty with discounts and freebies that come in the form of free products, discounts and cash back, or personal perks like free bag check on airlines. Now, however, there’s something called “surveillance pricing,” and it’s proving problematic. That’s when companies use your personal data to decide what price to charge you. Let’s say you're a Starbucks Rewards member. You might just find that the more coffee you buy, the fewer promotions you’ll see. It’s not just the fact that you’ve bought a latte every day for the past year; it’s that the company knows what you’re willing to pay. Surveillance pricing is legal for now, but that could change. The FTC has started looking into how companies track consumer behaviors beyond traditional methods and there’s growing momentum to put an end to surveillance pricing. So, should you ditch your loyalty apps and cards? If the convenience is worth it, keep using them. Just go in with your eyes open and treat every personalized offer with a healthy dose of skepticism.
